Swiggy had scaled back Swiggy Access from around 200 locations to 30-35 ahead of the sale
The share-swap deal will bring Swiggy as a stakeholder in [email protected], and the latter’s GMV would rise to $65 Mn post-acquisition
Swiggy has been on a cost-cutting drive, and recently fired 380 employees in a restructuring exercise
Foodtech major Swiggy, which has been looking at cutting down its costs to turn profitable, has sold its kitchen infrastructure business, Swiggy Access, to cloud kitchens infrastructure startup [email protected] in a share-swap deal.
The deal will bring Swiggy as a stakeholder in [email protected], the kitchen infrastructure startup was cited as saying in an ET report. The company further said that its combined gross merchandise value would increase to about $65 Mn after the acquisition.
The development comes a fortnight after the news broke that Swiggy was trying to sell Access ahead of its initial public offer (IPO). Swiggy had scaled back the kitchen infrastructure business from around 200 locations to 30-35 ahead of the sale.
Inc42 has reached out to Swiggy for details about the deal. The story will be updated upon receiving a response from the startup.
“The addition of Swiggy’s Access kitchens will bolster the reach and operations of [email protected]’s in four cities across 52 locations and 700+ kitchens, providing customers with more convenient and efficient food delivery options,” [email protected] founder Junaiz Kizhakkayil was cited as saying.
Swiggy’s CFO Rahul Bothra was cited in the report as saying that the foodtech giant launched Access to bridge gaps in restaurant supply.
“We are confident that [email protected] is fully equipped to nurture this ecosystem by innovating and building more supply. Swiggy continues to believe in the potential of this space and remains invested as a stakeholder in [email protected],” Bothra added.
Founded in 2015 by Kizhakkayil, BEENEXT-backed [email protected] claims to have 700 kitchens in around 52 locations across four cities. It also operates several private labels across various cuisines in the country.
[email protected] has partnered with several international fast food chains and national foodtech startups, including Subway, Domino’s Pizza, Wow! Momo, Chai Point, Chaayos and Mainland China.
While Swiggy Access’ existing network, tech and equipment are expected to bolster [email protected], the sale is a cost-cutting exercise for Swiggy.
Ahead of its IPO, the foodtech decacorn is looking to bring down its cash burn and consolidate its business verticals. It also fired 380 employees earlier this year, citing business restructuring and cost-cutting. Swiggy also shut down one of its private labels The Bowl Company in Delhi-NCR and its meat marketplace, citing non-performance.
Swiggy reported a net loss of INR 3,628.9 Cr in FY22, a 2.2X jump from INR 1,616.9 Cr in FY21 as the growth in expenses outpaced the revenue growth.
The foodtech giant recorded a total revenue of INR 6,119.8 Cr in FY22, up 2.2X from FY21, while expenses rose 2.3X to INR 9,574.5 Cr.